Pages

Tuesday, 7 July 2015

In
his resolve to end the lingering crisis of unpaid workers’ salaries in
the country, especially in several states of the federation, President
Muhammadu Buhari has approved a comprehensive relief package designed to
salvage the situation.

In addition to the direct cash
bailout, the three tiers of government will be sharing $1.7 billion from
the Excess Crude Account (ECA), effectively emptying the account meant
to shield the economy from exogenous shocks.

Opening up on the assistance to be rendered to the states, a source in
the presidency said the president approved a three-pronged relief
package that would end the workers’ plight nationwide.

He said
this entails: The sharing of about $2.1 billion (N413.7bn) in fresh
allocation between the states and the federal government.

“The money is sourced from recent NLNG (Nigeria Liquefied Natural Gas)
proceeds to the Federation Account, and its release was okayed by the
president,” the presidency official explained.

The second measure, he said, is a Central Bank of Nigeria
(CBN)-packaged special intervention fund that would offer financing to
the states, ranging from between N250 billion and N300 billion.

This would be in the form of soft loans available to states to access
for the purposes of solely paying the backlog of salaries, he added.

The third measure is a debt relief programme proposed by the Debt
Management Office (DMO) which will help states restructure their
commercial loans currently put at over N660 billion and extend the
tenure of the loans to 15 years, thereby reducing their debt service
obligations.

This third option would by extending the
commercial loans of the states, make more funds available to the state
governments which otherwise would have been removed at source by the
banks.

The presidency official noted that the federal
government would guarantee the extension of the loans for the benefit of
the states.